How To Track Down Life Insurance Policies

Did you know that between one-quarter and one-third of all life insurance policies go unclaimed upon the death of the insured? It’s true. Many people have life insurance, but don’t inform their loved ones of the policy’s existence. As a result, hundreds of millions of dollars annually go unclaimed by beneficiaries who aren’t aware that a policy exists.

You would think that insurance companies would distribute what is rightfully due. Although they would like to do so, the burden is on family members to notify their insurance company when a policyholder dies. In the absence of such notification, the policy goes unclaimed. And virtually no effort is made to find lost beneficiaries.

Isn’t it ironic to think that someone has made an effort to plan for their loved ones’ financial security, but then fails to inform people that he/she has done so? Sadly, this scenario is more common than you think.

If a loved one has passed away, and you suspect that he/she had a life insurance policy, here are some tips to help you locate it:

- Look through the deceased’s financial records

If the insurance policy is still active, a premium notice will eventually come in the mail. In the meantime, look at check registers and cancelled checks for evidence of premium payments to a life insurance company. You can also review income tax records to see if interest income or expenses on a life insurance policy were reported.

Next, check any safe deposit boxes that you know about. Since life insurance policies are often placed in bank safe deposit boxes, a review of the box’s contents might reveal the existence of a policy.

- Consult current and prior financial advisors

The deceased individual’s attorney, accountant, and other financial advisors may be a potential source of information about life insurance policies. Be sure to review address books for names of insurance agents or insurance companies with whom the deceased conducted business. If other insurance policies were in place, it is possible the agent in charge of these policies may know about your loved one’s life insurance policy, too.

- Contact previous employers

Contact the employee benefits offices at your relative’s former employers. Former employers may have a record of past group policies, and indicate whether their late employee’s beneficiaries are eligible for life insurance proceeds.

- Review any life insurance applications

Typically, the application for each life insurance policy is attached to the actual policy. If you can find any life insurance policies, look for applications attached to them. The application will have a list of all other life insurance policies owned at the time the policy was applied for.

- Search unclaimed property databases

Since unclaimed life insurance proceeds often wind up in state unclaimed property funds, you can perform a search of the unclaimed property databases maintained by the individual states in which they or deceased family members resided. One such database can be accessed by visiting the National Association of Unclaimed Property Administrators (www.unclaimed.org).

(Note: This database can be searched for other types of unclaimed assets, too. Banks, stockbrokers, utilities, and employers are all required to remit unclaimed funds to the government in a process known as “escheatment”. So, in addition to life insurance proceeds, an unclaimed property search might reveal other monies owed to the heirs of your deceased relative.)

Dealing with the grieving part of death is difficult enough without the practical challenges of sifting through years of built-up paperwork. Make life easier for your loved ones by keeping your own life insurance policies current. Also, make sure your beneficiaries know about the existence of such policies, and where your insurance information can be found.

Finally, talk with elderly parents or other relatives about life insurance policies survivors should know about. The conversation is sometimes awkward, but is necessary to ensure that families are prepared when this information is needed. Be sure to have that conversation now…before it’s too late.